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Study Resources (Accounting)

1) Which of the following is not a characteristic that distinguishes corporations from proprietorships and partnerships? A) Corporations are separate legal entities apart from the owners. B) Corporate earnings are subject to double taxation. C) Corporations have mutual agency. D) Corporations have continuous lives regardless of changes in ownership. 2) Corporations are separate taxable entities..
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11) Aviation Holdings Corporation's sales for the day totalled $10,552. Jensen collected an additional 7.50% in sales tax. The entry to record the day's sales includes a: A) debit to Sales Tax Expense B) debit to Sales Tax Payable C) credit to Sales Tax Expense D) credit to Sales Tax Payable 12) Dreams Take Flight.
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1) Current liabilities are obligations due within: A) one year or within the company's normal operating cycle if it is longer than one year B) one year or within the company's normal operating cycle if it is shorter than one year C) one month or within the company's normal operating cycle if it.
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11) Liquidation value is the price the company agreed to pay to redeem their preferred shares when the shares were originally issued. 12) Koffler Corp. reported the following shareholders' equity: Share capital: Preferred shares, 30,000 shares authorized, 7,500 shares issued, redemption value, $53.50$ 393,750 Common shares, 200,000 shares authorized, 135,000 shares issued 607,500 Total share capital$1,001,250 Retained earnings.
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40) Chapter 11 Inc. entered into the following transactions relating to notes payable: Sept.1 Purchased inventory costing $48,000 by signing an 8-month, 6% note payable. Nov.1 Purchased inventory costing $30,000 by signing a 1-year, 7% note payable. a. Prepare journal entries to record the above transactions. b. Assuming Chapter 11 Inc. has a December.
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8.5  Understand the advantages and disadvantages of borrowing 1) All of the following are advantages of issuing stock except: A) less risky to the issuing corporation B) creates no liabilities for the corporation C) creates no interest expense which must be paid D) generally results in a higher earnings per share 2) All of the following.
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23) Foothills Industries gathered the following data for the year ended December 31, 2010, related to its equipment.              Accumulated EquipmentDepreciation January 1, 2010, balance$88,000$40,000 Total debits to the account 55,000? Total credits to the account? 56,000 December 31, 2010, balance 92,000 57,000 Based on the above data, prepare the journal entry to record the sale of.
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10.3  Understand consolidated financial statements 1) Goodwill arises when a parent company: A) pays less to acquire a subsidiary company than the market value of the subsidiary's net assets B) pays more to acquire a subsidiary company than the market value of the subsidiary's net assets C) pays less to acquire a subsidiary company.
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21) The effective-interest method of amortization keeps interest expense at the same dollar amount of the bond's carrying value for every interest payment over the bond's life. 22) Interest expense will decrease each period if a company uses the effective-interest method of amortization and the bonds are issued at a discount. 23).
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9.7  Report equity transactions on the statement of cash flows 1) Proceeds from the issuance of shares appear in which, if any, section of the cash flow statement? A) operating activities section B) investing activities section C) financing activities section D) Proceeds from the issuance of shares do not appear in the cash flow statement. 2).
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7.5  Account for intangible assets and amortization 1) All of the following are intangible assets except: A) trademarks B) natural gas C) goodwill D) copyrights 2) Copyrights are granted for the life of the author plus: A) 10 years B) 40 years C) 50 years D) 100 years 3) Goodwill is equal to the excess of the cost of an acquired.
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28) On January 1, 2010, Red Deer Corporation paid $360,000 to purchase 32% of the outstanding voting stock of English Court Corporation. The equity method is used to account for the investment. The following data relate to this investment. 2010 ?Dividends received from English Court Corporation amounted to $20,000. ?Net income reported by.
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8.3  Account for bonds payable 1) The carrying amount of bonds issued at a discount is calculated by: A) subtracting Discount on Bonds Payable from Bonds Payable B) subtracting Interest Payable from Bonds Payable C) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable D) subtracting Interest Expense from Bonds.
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8.2  Understand bonds payable 1) Secured bonds are also called: A) mortgage bonds B) callable bonds C) debenture bonds D) convertible bonds 2) Bonds which are backed only by the good faith of the borrower are referred to as: A) mortgage bonds B) secured bonds C) registered bonds D) debenture bonds 3) Bonds which mature at the same time are called: A).
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11) The adjusting entry for investments contains a credit to Investments for $651. The income statement will reflect: A) revenue of $651 B) an extraordinary gain of $651 C) other comprehensive income/loss of ($651) D) nothing, because gain/loss is not reported on the income statement 12) The Gain/Loss on the sale of Available for Sale.
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11) Retail Energy Corporation paid $1,300,000 on January 1, 2011, to purchase 32% of the outstanding shares of Natural Gas Limited. If this investment is accounted for using the equity method of accounting, and Natural Gas Limited reports $450,000 of net income in 2011, the following entry will be made.
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31) Predecessor Company Inc. has outstanding $8,000,000 of 9%, 15-year callable bonds with a carrying value of $7,750,000 and a call price of 103 1/2. The current market price of the bonds is 105 1/2. a.Should Predecessor Company Inc. call the bonds or purchase them on the open market? b.Prepare the entry.
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11) Alliance Agreement Corporation is considering two plans for raising $2,500,000 to expand its current operations. The first plan involves the sale of $2,500,000, 8%, 10-year bonds sold at face value. The second plan involves selling 50,000 common shares at $50 each. Alliance Agreement Corporation currently has outstanding 200,000 shares.
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31) Stock dividends result in a reduction in the balance of the contributed capital account. 32) The entry to record the declaration of a cash dividend includes a credit to retained earnings. 33) During 2010, Temper Pedic Corporation engaged in the following selected transactions: Jan.1Issued 15,000 common shares at $18 per share. June 15Reacquired.
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8.6  Account for leases 1) Which of the following statements about capital leases is incorrect? A) A capital lease is a long-term financing obligation. B) A capital lease is noncancellable. C) Under a capital lease, the lessee's books do not report the leased asset. D) Under a capital lease, the lessee records a lease liability.
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21) Short term investments are recorded at market value and reported on the balance sheet at cost. 22) Why is understanding the extent to which ATCO Ltd. influences another company important for accounting purposes?  What impact does the degree of influence ATCO Ltd. has over another company have on accounting? 23).
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7.3  Examine additional depreciation topics 1) Hot Wort Ltd. purchased equipment on April 1, 2011, for $140,000. The residual value is $20,000 and the estimated life is 6 years or 55,000 hours. Compute depreciation expense for the year ending December 31, 2011 if Hot Wort Ltd. uses the straight-line method of.
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9.5  Use share values in decision making 1) For a company that has only common shares outstanding, dividing total shareholders' equity by the number of shares outstanding determines the: A) liquidation value per share B) earnings per share C) market value per share D) book value per share 2) When a company has both common shares.
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9.2  Account for the issuance of shares 1) Assets received in exchange for the issuance of stock should be recorded at: A) historical cost B) historical cost less accumulated amortization taken to date C) fair market value as determined by a good-faith estimate from independent appraisers D) book value prior to the issuance 2) Quo Corporation.
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9.3  Describe how share repurchase transactions affect a company 1) Which statement below regarding a share repurchase is true? A) A share repurchase grows a company's assets and equity. B) The company repurchasing shares is not entitled to vote. C) Repurchasing shares shrinks a company's assets and equity. D) Repurchasing shares increases retained earnings. 2) A.
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7.6  Report long-lived assets on the statement of cash flows 1) Prepare adjusting journal entries dated December 31 of the current year for the following independent situations. a.Hops Corporation acquired several patents on March 1 of the current year for a total price of $48,000. The patents have an estimated remaining legal.
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28) At year end the Carleton Corporation reviewed all of its property, plant and equipment assets for impairment. It discovered that its boiler's recoverable amount exceeded its carrying value by $5,500.  Another one of its assets, a warehouse building previously written down for an impairment of $12,750 experienced a financial.
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11) Following is the shareholders' equity section of the balance sheet of Easypix Corporation: Share capital: Preferred shares, 80,000 authorized, 50,000 issued$ 5,000,000 Common shares, 3,000,000 authorized, 1,500,000 shares issued 7,500,000 Total share capital$12,500,000 Retained earnings 4,800,000 Total shareholders' equity$17,300,000 Assuming Easypix purchases 15,000 shares of its common shares at $12.50 per share, the number of common.
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9.4  Account for dividends 1) When a cash dividend is declared: A) the Cash account is debited. B) the Cash account is credited. C) the Retained Earnings account is debited. D) the Retained Earnings account is credited. 2) A dividend becomes a legal liability of the corporation on the: A) date of payment B) date of declaration C) date.
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21) In the majority of cases, an organization cancels the shares they repurchase. 22) Obus Corporation has issued 75,000 common shares. The average issuance price was $23 per share. Obus Corporation recently engaged in the following share repurchase transactions: a.Purchased 15,000 shares of its own shares at $25.00 per share. b.Sold 2,500 shares.
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11) An example of a postretirement benefit provided by a company is medical insurance for retired workers. 12) A defined contribution plan is one where the company promises the employee a specific monthly benefit upon retirement. 13) A defined benefit pension plan is one where the company promises the employee a specified.
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21) Following is the shareholders' equity section of the balance sheet of the Everslim Company: Share capital: Preferred shares, 420,000 shares authorized, 4,000 shares of $1.50 preferred issued$400,000 Common shares, 100,000 shares authorized, 30,000 shares issued 150,000 Total share capital$550,000 Retained earnings 267,000 Total shareholders' equity$817,000 The preferred shares are currently selling for $102.25 per share and the common.
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21) Contributed capital as shown on a corporate balance sheet includes the share accounts and any contributed surplus as well as retained earnings. 22) Preferred shares are a hybrid between common shares and long-term debt. 23) The president of the corporation can declare dividends. 24) Explain the fundamental difference between retained earnings and.
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11) Stock dividends: A) are distributions of cash to the shareholders B) reduce the total assets of the corporation C) have no effect on total shareholders' equity D) increase the total liabilities of the corporation, and decrease the total shareholders' equity 12) Dividends in arrears on cumulative preferred shares are: A) reported as a current liability.
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8.4  Measure interest expense 1) Under the effective-interest method of amortizing bond premiums, the interest expense recorded for each semi-annual interest payment: A) will increase over the life of the bond B) is equal to the carrying value of the bond times the contract rate of interest for each semi-annual interest period C) is.
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7.4  Analyze the effect of property, plan, and equipment derecognition 1) Rhoundakona Corporation bought a capital asset on January 1, 2009, at a cost of $35,000. Estimated residual value is $5,000 and the estimated useful life is 8 years. The company uses straight-line depreciation. On January 1, 2012, Rhoundakona's management sells.
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8.7  Report liabilities on the balance sheet 1) Under IAS 39 financial liabilities must be measured at amortized cost. 2) Under IAS 39 financial liabilities must be measured at cost. 3) IFRS 7 required organizations to report the fair value of liabilities compared to their carrying amounts. 4) Under IAS 39 financial liabilities must.
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10.2  Use the equity method for investments 1) Investments accounted for using the equity method are initially recorded at: A) fair market value of the investee company multiplied by the percentage of ownership acquired B) the total of the investee's equity accounts multiplied by the percentage of ownership acquired C) cost D) the lower of.
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